What Is A Dividend From A Life Insurance Policy?
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63333 POINTSview profilePeggy MaceMost of the U.S.A dividend from a life insurance policy is a return made to you when the insurance company makes a profit. Dividends are only given by mutual companies in participating life insurance policies. They can be taken in cash or they can be applied to the policy to purchase additional paid up life insurance, repay policy loans, or reduce the premium on your policy.Answered on June 24, 2013flag this answer
10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNWhen you see a dividend payment on your life insurance policy it means your life insurance company is a mutual company. This means as a policyholder you are considered an "owner" of the insurance company, kind of like a stockholder in a company. The dividends are profits repaid to the policyholders in a form of reducing your premiums when the company makes excess profits for the year. Depending on the type of policy you have, dividends can have options to be paid in cash, reduce loans or increase policy cash value. Common mutual life insurance companies include New York Life and Northwestern Mutual.Answered on September 3, 2015flag this answer
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